Re: How much Credit Limit should one aim for?

what are your thoughts on how much total credit card limit a person should aim for?

I have noticed some people with lots of cards and limits in excess of $100,000 while some around $50,000 and some in $20,000 range.

What is ideal?

I'd aim for an amount that is 10x your average monthly spend. This will let you maximize your FICO by keeping your util at 9% or lower. While there will be months that are higher than normal, you'll be able to charge without worrying about util most of the time.

Re: How much Credit Limit should one aim for?

10x annual income will allow you to keep utilization low even if you lose your job for a year. That is a rather unrealistic target to aim for and I am kind of joking about it, but honestly. The sky is the limit as far as total limits.

10x your average months spend is not nearly enough. Your holiday spending is likely much higher than your basic spending during the year. So your utlization will be off. It is better to have way more than you need than to have just enough.

As long as you can get it to report between 1%-9% no matter what, that is the total limit you want.

I would say a more realistic limit would be the average of 100 times you lowest months spend and 10 times your highest months spend.

Re: How much Credit Limit should one aim for?

Dustink wrote:

10x annual income will allow you to keep utilization low even if you lose your job for a year. That is a rather unrealistic target to aim for and I am kind of joking about it, but honestly. The sky is the limit as far as total limits.

10x your average months spend is not nearly enough. Your holiday spending is likely much higher than your basic spending during the year. So your utlization will be off. It is better to have way more than you need than to have just enough.

As long as you can get it to report between 1%-9% no matter what, that is the total limit you want.

I would say a more realistic limit would be the average of 100 times you lowest months spend and 10 times your highest months spend.

Those are some excellent points. It makes sense to keep the avail credit at high, so the util can always be below 9%

Re: How much Credit Limit should one aim for?

Dustink wrote:

10x annual income will allow you to keep utilization low even if you lose your job for a year. That is a rather unrealistic target to aim for and I am kind of joking about it, but honestly. The sky is the limit as far as total limits.

10x your average months spend is not nearly enough. Your holiday spending is likely much higher than your basic spending during the year. So your utlization will be off. It is better to have way more than you need than to have just enough.

As long as you can get it to report between 1%-9% no matter what, that is the total limit you want.

I would say a more realistic limit would be the average of 100 times you lowest months spend and 10 times your highest months spend.

10x your average months spend can be enough depending on your lifestyle. Personal I do not count myself credit card limits as backup funds. I believe in having a savings for job lost or other unexpected events. I have about a 3 month stash , which over the next year or so hope to buld out to a year worth.

Re: How much Credit Limit should one aim for?

toppers555 wrote:

Dustink wrote:

10x annual income will allow you to keep utilization low even if you lose your job for a year. That is a rather unrealistic target to aim for and I am kind of joking about it, but honestly. The sky is the limit as far as total limits.

10x your average months spend is not nearly enough. Your holiday spending is likely much higher than your basic spending during the year. So your utilization will be off. It is better to have way more than you need than to have just enough.

As long as you can get it to report between 1%-9% no matter what, that is the total limit you want.

I would say a more realistic limit would be the average of 100 times you lowest months spend and 10 times your highest months spend.

10x your average months spend can be enough depending on your lifestyle. Personal I do not count myself credit card limits as backup funds. I believe in having a savings for job lost or other unexpected events. I have about a 3 month stash , which over the next year or so hope to buld out to a year worth.

I agree, credit cards are not back up funds. I never make a purchase that I don't already have funds to cover. I have never paid interest on any credit card, and I have an emergency fund large enough to cover my expenses for 5 years.

I was just full of it when I said 10x annual income, although why not have limits that high? In the event of a job loss and depletion of savings, one could still keep their credit score in tack for a good period of time.

But my average of 100x lowest spend and 10x highest spend was actually a serious answer. That will almost always keep you between 1-9% when paying in full each month. Although, I see no reason to not have limits higher than that. Other than some months utilization will report as 0% because you will not reach the 1% mark.

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IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.